Jefferies Raises Price Target on Microchip Technology (MCHP) to $72 Following 2Q Beat

Jefferies reiterated a Buy rating on Microchip Technology (NASDAQ: MCHP), and raised the price target to $72.00 (from $68.00), following the company's 2Q earnings report. On a combined basis, sales of $874m were 150bps above consensus $861m while EPS of $0.94 were 7c above. MCHP expects SepQ sales of $821-874m, $848m at the midpoint, in line with consensus. MCHP's EPS outlook of $0.85-0.95 was $0.07 above consensus at the midpoint.

Analyst Mark Lipacis commented, "MCHP's SepQ sales/EPS beat by 150bps/$0.07 with upside driven by better cost synergies from ATML. MCHP's DecQ sales outlook is inline with consensus while EPS outlook of $0.90 is 7c above. MCHP now expects $0.50 accretion from the ATML acquisition for F2017, versus $0.40 previously. We continue to like MCHP for its MCU focus, diversified markets, accretive M&A, and capital return, and think ATML cost + rev synergies will surprise investors on the upside."

For an analyst ratings summary and ratings history on Microchip Technology click here. For more ratings news on Microchip Technology click here.

Shares of Microchip Technology closed at $62.23 yesterday.

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